“Hi, this is Rachel from RoboCaller services calling. Press 1 to be scammed.”

FTC shuts down five robocallers, aims to eliminate "Rachel" for good.

Five robocalling companies that defrauded consumers of an estimated $30 million by promising to lower credit card interest rates in exchange for exorbitant fees have been shut down by the Federal Trade Commission, the agency said today.

The scam is a familiar one. It starts with a call like this: "Hello, this is Rachel at cardholder services, calling in reference to your current credit card account. There are no problems currently with your account. It is urgent that you contact us concerning your eligibility for lowering your interest rates. Your eligibility expires shortly, so please consider this your final notice. Please press the number '1' on your phone to talk with a live operator about lowering your interest rate. Or press the number '2' to discontinue further notices. Thank you, and have a great day."

Pressing "2," of course, rarely has any positive effect. But pressing "1" transfers the call's recipient to a telemarketing boiler room. Here, scammers try to convince their marks they can lower credit card interest rates to as low as 6.9 percent or even 0 percent in exchange for up-front payments of several hundred dollars to $3,000.

"To convince them to pay the fee, telemarketers often say that it will be more than offset by the money the consumer will save through the program," according to the FTC, which held a press conference in Chicago and released details on the lawsuits it has filed. In some cases, the FTC said, "consumers’ credit cards were charged even if they did not agree to pay for the service. In other cases, the defendants allegedly do not disclose a fee at all, or claim there will be no fee." Consumers were told they would save thousands of dollars in finance charges due to lower interest rates, that they would be able to pay off their debt two to three times more quickly, and that the up-front fee would be refunded if those promises weren't met. Of course, fees were rarely refunded.

Have you met Rachel?

"Rachel" herself is an elusive target, but her voice is widely known for a reason. While there are many companies performing the credit card scams, the FTC said they all rely on a smaller number of firms to actually do the computer-operated robocalling. In one case, a company called Asia Pacific Telecom was accused of making 2.6 billion pre-recorded calls over an 18-month period before getting shut down in July. That company's services were used both for credit card and auto insurance scams.

The five telemarketing companies detailed today, three in Florida and two in Arizona, are suspected of outsourcing the calls to companies like Asia Pacific. There is a relatively small number of companies with the technology to make these calls, and a somewhat larger number of wholesalers that connect those robocalling companies to an even bigger number of telemarketing scammers. In the case of Asia Pacific, the company had a legitimate business of sending out charitable and political robocalls (which are legal) to help mask its shady work, FTC Midwest Region Director Steven Baker told Ars in an interview after the press conference.

The FTC receives 200,000 complaints every month about these types of robocalls, and "Rachel" is the most-cited offender, agency officials said. They are effective—one boiler room got 4,500 calls a day from consumers who pressed "1."

The five companies—with the names Treasure Your Success, Ambrosia Web Design, A+ Financial Center, The Green Savers, and Key One Solutions—are facing criminal complaints in US District Court and have had all their assets frozen. The FTC said they violated several federal laws. For one, it's illegal for telemarketers to charge consumers money in advance while promising to reduce their debt. The FTC said they also ignored the Do Not Call list, and violated laws against robocalling and making deceptive sales claims.

Shutting down both the boiler rooms and the robodialers is difficult, but the FTC has some more tricks up its sleeve.

"We have full access to all of their business records and we're going to look at those and figure out who they're paying for dialing," Baker told Ars.

The dialing services, of course, use VoIP technology and caller ID spoofing to hide their identities. Going after the boiler rooms is easier and can have a more immediate positive impact on consumers. The scam targets aren't paying money to the dialers, they're paying money to the telemarketers—so the money trail is easier to identify. The FTC said all the money it collects from the companies whose assets have been frozen will be distributed to the people who were ripped off.

30,000 fooled, $30 million lost

The FTC still has only a rough estimate on the damage caused by these five companies. The estimate as of today is that they scammed more than 30,000 consumers and raked in roughly $30 million.

One of the victims is named Alyce Weisbach, an 84-year-old resident of Illinois who described her experience today at the FTC's press conference. Weisbach got the telemarketing call on October 19, 2011, at a time when she was struggling with credit card debt and had an interest rate of 25 percent on one of her cards.

"All I really remember from our conversation was that he kept promising me that Green Savers would lower my credit card debt and save me a lot of money," she said.

Weisbach ended up giving the telemarketer her credit card numbers, Social Security number, and her mother's maiden name. "As soon as I gave Green Savers my personal information, I regretted it and realized I had made a big mistake," she said.

Weisbach ended up being charged about $1,900. When she tried to get a refund from Green Savers, they claimed they had a legal, verbal contract and refused. FTC officials said the best way for people to get their money back is to dispute the charge with their credit card company, and that they should also file complaints with the FTC. Weisbach ultimately did get her money returned.

Even before today, the FTC had filed 12 cases against robocall operations, five of which were doing credit card scams. Today's announcements bring the total up to 17, and the agency is not done. The FTC is even offering a $50,000 cash prize to anyone capable of devising a technological solution to stop the robocallers in their tracks. "You have people hurting financially, struggling to stay afloat," Baker said. "They can't afford to be ripped off another $3,000," he noted—especially when that charge is going on the same credit card they were struggling to pay off in the first place.

These people call my coworker all the time on his business line. He typically presses 1 to talk to somebody and pretends to be a chinese guy with 20 maxed out credit cards that he want's refinanced. One guy actually got mad at him and said he needed to go away and then hung up. We were like, "WTF, you called us man!".

Sitting working at home today. I got to get all the calls that typically fill my answering machine. What sucks is the penatly is so low. I mean if everyone pressed one and was able to dispute the charge. Then they'd need the credit card company's help. Which they of course dont' really care themselves after they get their percentage.

My house has a line for a security system to dial out. I don't even know the number and have never given it out. However, for the last few years, we've gotten a half dozen to a dozen calls a day on the line. I check the voicemail sometimes for amusement, and we get a number of scams, including this one. When bored at one point, I took the caller id numbers and did a reverse look up on them out of http://whocalled.us. They were about half "legit" telemarketers and half scams.

We were getting two or three of these calls a day until very recently. Each of the perpetrators should be sentenced to solitary for life, with the following condition:

There will be a phone in the cell, in an awkwardly-reachable position, surrounded by obstacles. The phone will ring at random intervals throughout each day and night. Nearly all of the calls will be silent or will play one of the card services messages. But, sometime during their incarceration, there will be a call which, if answered, would set them free.

I think I've filed about a dozen reports on the Do Not Call site. I'm glad that I was able to do my small part in putting this nuisance to an end.

Now the FTC needs to take down Federal Financial, who seems to be stepping in to take their place. "Hi, I'm not selling you anything. I want to give you a free prize. Oh,do you mind if I ask you some tremendously personal questions while I'm on the phone? Oh, and let me thank our sponsor while I have a captive audience..."

I always press 1 on those calls. It costs them at least a few cents to route the live call, and a few more for the telemarketer at the other end to recite their spiel. If enough people do this, it's effectively a DDoS.

And don't forget to send postage-paid envelopes back to physical junk mailers. Sadly few of those any more.

I think it should read, 30,000 fools, $30 million lost. This type of credit reduction scam isn't new, it has been detailed at length in blogs, on-line tech sites, general news sites, and well documented by national news agencies and local affiliates. At this point, people have been adequately warned to ignore these calls.

At least some of these scammers have been shut down. Though, that will only be temporary as long as enough fools exist willing to hand over more money for empty promises.

We were getting two or three of these calls a day until very recently. Each of the perpetrators should be sentenced to solitary for life, with the following condition:

There will be a phone in the cell, in an awkwardly-reachable position, surrounded by obstacles. The phone will ring at random intervals throughout each day and night. Nearly all of the calls will be silent or will play one of the card services messages. But, sometime during their incarceration, there will be a call which, if answered, would set them free.

EDIT: grammar.

Anyone involved in this scam needs to go to JAIL... and I'm not just talking about the ringleaders. Every employee, every person who sat in their call centers and made those calls ought to be personally liable for every dollar that was scammed.

If the government started prosecuting the line workers on these things, people would be afraid to go to work for telemarketers any more, which would solve the whole problem.

If the government started prosecuting the line workers on these things, people would be afraid to go to work for telemarketers any more, which would solve the whole problem.

Until they move the call centers over to India.

Considering the absolutely massive number these scumbags call our landline (even though it's DNC) every week for years, only 30,000 takers seems like a vast underestimate. You'd think there'd be way more marks out there than that, and all of them hit up at least once.

Being staked over fire ant mounds in the middle of the desert is too good for anyone behind that "Hi, this is Rachel from card services" call.

I think cold-calling should just be plain illegal, period. It's a waste of everyone's time; I have never, ever responded to a cold-call to my business or my home.

If the automatic response to every cold call was a week in jail, how many people would be willing to work for a telemarketer?

These people don't necessarily know their company is full of shit. Then again, given how these scammers hang up on you the moment you mention anything other then a desire to do business, they must have an inkling.

IMO what needs to happen already, is that it needs to become illegal to spoof numbers. It's mind blowing to me that this is still legal. If they couldn't spoof, then the calls wouldn't show up as a different number each time, not to mention it would make it easier to tie down the calls to an actual entity.

I was getting about a call a week from these guys for the last 6 months. Just started filing donotcall.gov complaints each and every time. Takes about 60s to do, and appears to have had some value.

Otherwise when I got really pissed, to blow off steam what you can do (keeping in mind they hang up on you the moment you deviate from their desired course) is get them on the line, play along ("yes I have 4 ccs, all with at least a 5k balance, and 2 of them are completely maxed") and then tell them you need to go get your credit card from your car, or go get your wallet, or something.

Then put the phone on mute, put it down, and go about your day. If you really want to experiment, come back periodically with some excuse that indicates you are making "progress".

The goal here is that every moment they spend sitting on hold with you is a call they aren't making to a potential victim. You cut into their scams/hr ratio, and waste their time.

Awwww. I tend to like getting scam calls since it allows me to mess with them to blow off some stress. "Oh, you want to sell me cut-rate insurance on my vehicle? That sounds excellent! I'm currently driving a Saturn-class multi-stage rocket with about 238,900 miles on it, what are your rates on those?" "My credit card isn't from Visa, it's from Dave and Buster's - and the balance isn't so bad that I'd need help, I like to think that 8,000 tickets is actually a pretty impressive total!"

Great that the FTC put a stop to it. But this scam has been going on for years, to the extend that "Rachel" is now a household word. The FTC got 200,000[/] complaints [i]per month (hard to believe, actually). What the heck was the FTC waiting for? They don't take action until a scam reaches the $30 million threshold? It can't be that hard to track the money flowing from the credit card company to the scammers.

Oh thank goodness they finally tracked down this "Cardholder Services" scam. I just got a call from them Tuesday. I used to be diligent about filing DNC complaints, but I gave up after I filed about 10 of them and I didn't hear anything about them investigating or making progress.

I'm normally not one to advocate "alternative" punishments, but I'm with Aurich.

It never ceases to amaze me how we let thinnest veneer provide protection to what is clearly nothing more than theft. If I go out and rob people I will go to jail. If I start a company that goes out and robs people I can operate with impunity for years collecting millions of dollars. I'm sorry, it can't be that hard to trace money. I'm sure if I was cold calling people or sending spam offering to sell cocaine or meth the Feds would have no problem tracking down where the money was going. But cold call people or send spam to just flat out steal money without even offering a real product? Somehow it takes years and years for the Feds to even think about taking action? That's ridiculous.

Man, I always press '1'. And then would try to keep them on the line as long as possible. Even gave out faked credit card numbers, which they would have to spend time to verify. Oh, I'm sorry, repeat that back to me....yeah that '6' is supposed to be a '7'. They would run off and verify it again. Eventually I would get bored, but I'm sure they are paid by the hour and I wasted part of that hour.

Eventually if enough people waste their time, it won't be economical to keep up with the cold calling.

Being staked over fire ant mounds in the middle of the desert is too good for anyone behind that "Hi, this is Rachel from card services" call.

I think cold-calling should just be plain illegal, period. It's a waste of everyone's time; I have never, ever responded to a cold-call to my business or my home.

If the automatic response to every cold call was a week in jail, how many people would be willing to work for a telemarketer?

I have a personal policy that I must initiate every sales transaction. Even if someone called me up with a great deal on exactly what I needed I would have to say “No”. In addition, even if I initiate the transaction and a sales person goes down the time limited must make a decision right now path the decision becomes “No” again.

If more people established similar rules for themselves it would leave most of the sleazy salespeople out in the cold.

"We were getting two or three of these calls a day until very recently. Each of the perpetrators should be sentenced to solitary for life, with the following condition:

There will be a phone in the cell, in an awkwardly-reachable position, surrounded by obstacles. The phone will ring at random intervals throughout each day and night. Nearly all of the calls will be silent or will play one of the card services messages. But, sometime during their incarceration, there will be a call which, if answered, would set them free."

"My object all sublime, I shall achieve in time, is to make the punishment fit the crime". You sir, have aced that test.

I always enjoy messing with these people. I once got them to call the do-not-call list complaint line. Another time I took the ultra-hoosier route and kept telling him I wanted a new truck. When I paused for a moment to yell at my (fake) wife Ethel (into the receiver, naturally,) the guy on the other end got so mad he dropped the f-bomb several times, threatened my parentage, and vowed to "come down there and beat the shit out of me." He finally hung up when I told him I'd come to him and meet him in the parking lot.

Smack wrote:

I wish they would do something about the 202 area code (DC) political robocalls I get to my cell phone.

I have the same wish, but I'm not holding my breath. There's a reason political calls are exempt from the do not call list.

IMO what needs to happen already, is that it needs to become illegal to spoof numbers. It's mind blowing to me that this is still legal. If they couldn't spoof, then the calls wouldn't show up as a different number each time, not to mention it would make it easier to tie down the calls to an actual entity.

Agreed.

Phone companies, take note. You had better be doing your part to stop number spoofing. These scams account for about 4 out of 5 of the calls I get on my landline now. I've been too complacent to cancel my landline yet, but these calls will probably push me over the edge.

I tend to hang up on any recording, a real person will call if something is important. The only exception is during election years, I like to know which candidate is unwilling to hire people during an unemployment crisis.

I wonder, do they hire people out of craig's list or some other such place. Seems like they could just start taking part time cold call jobs till they find the right ones.